Every market is different, of course; so this report is local to the Southeastern portion of Michigan, which embraces Washtenaw, Wayne, Livingston, Oakland and Macomb Counties and is inclusive of several cities, including Ann Arbor, Warren, Troy and Detroit. The statistics that were used to generate the chart below were collected from the various MLS's in those areas and compiled by Real Estate One.
The chart shows average home sale values and clearly shows what happened to this market right after it hit its peak in 2006. Our crash was rather dramatic and reached an average of 40% loss in values, with some areas (especially the City of Detroit) going well beyond that into value losses of 50-60%. We believe that the market bottomed out somewhere in 2011, after five years of falling values. The chart shows a gradual return of value over the next five years.
It should be noted that this chart assumes a fairly brisk appreciation rate and there are many factors which could impact the rate of recovery of value. A financial meltdown in Europe, for instance, would certainly not help our economy and would slow everything down. The pace of recovery could still be impacted by many factors, but the point is that those waiting to see their home values return should anticipate it taking years, not months.
Other factors that will impact the pace of recovery include the speed with which the lendors recover from the legal issues of the Rbob-signing debacle and get back on track with foreclosures and the release of the overhang of foreclosure inventories. We still need to work that inventory off the books.
Finally there seems to be growing awareness in Washington that something needs to be done about resetting all of the underwater mortgages that are essentially damming up the normal flow of homes and home buyers in the markets. I'm not sure that there is the political will to do anything this year, with the election looming; so, perhaps that is a 2013 issue to resolve - depending upon the election outcome.
I suppose I’m a little like Linus sitting in the pumpkin patch on Halloween nioght awaiting the coming of The Great Pumpkin; however, I still have hope that at least one Federal program might end up dong some good for the housing industry – perhaps HARP 2.0.
The original Home Affordable Refinance Program, aka. HARP 1 – was a failure mainly because it failed to recognize the severity of the problem and had too many built in restrictions that limited the number of underwater homeowners who could qualify. HARP 2.0 lowered or removed those bars and should end up helping more homeowners. At least that’s the goal.
The major idea is to let homeowners who’s home values have sunk below what they owe on their old mortgages refinance with new loans at lower rates, even if the home wouldn’t appraise at the loan value in today’s market. In fact, the house won’t even ned to be re-appraised. The keys to the program are demonstrating the ability to continue to pay the new mortgage. You’ll note the “continue to pay” phrase. HARP 2.0 is aimed at people who have kept their current mortgages current, not those who are behind and headed for foreclosure. HARP 2.0 hopes to prevent foreclosures by providing some payment relief to those who have struggled but kept up payments, so far.
One key component to HARP 2.0 is that the mortgage on your house must be owned or guaranteed by Fannie Mae or Freddie Mac, which covers the majority of U.S. mortgages. Even if you send your money to another company called the ”mortgage servicer”, Fannie or Freddie may be in the background for your mortgage. To find out if your home qualifies, you can to go their Web sites – http://www.fanniemae.com/laonlookup/ or http://www.freddiemac.com/mymortgage/ and look up your address.
The program should be available now through most mortgage companies, so check with your preferred lender. If they aren’t supporting the program, check with a different lender.
So, maybe it’s not the Great Pumpkin after all; but, maybe it will help keep a few more homeowners who are struggling in this weak economy in their homes.
This is a time of the year when there are numerous fund raising activities going on. There are a couple of fundraising activities in the local Huron Valley area that are particularly worthy of note because of the unique charity that they support.
Our part of Michigan, like many areas in the country these days, has quite a few families who are dealing with hardship and are unable to properly feed the family. We are blessed to have the Community Sharing Outreach Center Food Pantry in Highland to help those families with free food. Carolyn and I always ask the attendees at our annual Real Estate One Christmas party to bring food to donate to the Food Pantry and always have several bags to take in after the party.
Some time ago the people at Community Sharing noticed that some of their supported families were sharing what little they had with their family pets, because they couldn’t afford to feed them either. So, the Community Sharing people started a Pet Food Pantry, which they believe is unique in MIchigan and maybe in the country. Local vets and pet owners in the community immediately began supporting the effort to help feed family pets. Peter Barnes and Julie Hass, owners of Veterinary Care Specialists became especially committed to seeing this effort succeed and have spearheaded a couple of local fund raising efforts.
A committee was formed to create a calendar for 2012 that features the pets of local business owners, each of whom donated to have their pets featured in the calendar. Carlos Allison of The Digital Document Store in Milford donated the printing of the calendar and several merchants agreed to carry the calendar. All of the proceeds from the sale of the calendar go directly to support the Community Sharing Pet Food Pantry. Calendars are $6 each or $5 apiece for 10 or more.
The next fund raiser is upcoming – getting your pet’s picture taken with Santa. This event will be he
ld on Dec 3rd and the 10th at the Pettibone Creek Powerhouse, aka. the Milford Powerhouse, at 225 West Liberty St in Milford (Google Map that, so you can find it). This event is also sponsored by Veterinary Care Specialists and supported by Friends of the Powerhouse. For a donation of pet food or cash, you’ll get a nice picture of your pet with Santa and the digital file of that picture. You can take that picture file to The Digital Document Store (DDS) in Milford and they’ll turn it into Christmas cards for you to send out. DDS owner, Carlos Allison, will donate 10% of the proceeds from each specially priced card printing order to the Pet Food Pantry.
To find out more about the Pet Calendar and the Santa Paws pictures with Santa events, visit my web site – http://www.movetomilford.com/ – and click on the pictures for both on the right hand side of the home page.
If you’d like to support this worthy and unique cause, please send donations to Community Sharing Outreach Center, PO Box 405, Highland, Michigan 48357. Let them know if your donation is for the Pet Food Pantry only and let them know that you heard about it here and/or on my Move to Milford web site. If you are local, buy a calendar at any of these locations and then plan on getting your pet’s picture taken with Santa on the 3rd or 19th of December – it’s fun and supports a great cause.
I finalized the local area sales report for October last night and published the figures on my Web site www.movetomilford.com , so another month in 2011 is in the books. It “felt” like October was dong a little better as we were going through it, so I decided to look back and see how it compared to September of this year and also compare it to October of 2010. I would look at August numbers too, except that August is a “last minute rush” sales month as people try to get into houses before school starts.
The sales for three of the townships that I track were as follows:
Milford –
October 2011:
20 sales (45% distressed), with an average sale price of $180,990, at an average price of $85/Sq Ft
September 2011:
14 sales (43% distressed), with an average sale price of $174,815, at an average price of $93/Sq Ft
October 2010:
14 sales (36% distressed), with an average sale price of $188,366, at an average price of $86/Sq Ft
I didn’t keep the same statistics back before 2010; however, I did keep enough to be able to discern the number of sales in Milford in October for the last few years – 19 sales in 2009, 18 in 2008 and 11 in 2007.
So, perhaps the feeling that things are getting better has merit. Sales are up in Milford, even if a significant portion of them involve distressed homes. That is just an unfortunate fact of life these days.
Highland –
October 2011:
20 sales (50% distressed), with an average sale price of $160,303, at an average of $78/Sq Ft
September 2011:
32 sales (37% distressed), with an average sale price of $180,575, at an average of $91/Sq Ft.
October 2010:
11 sales (55% distressed), with an average sale price of $114,036, at an average price of $81/Sq Ft
So, Highland is doing significantly better than last year; although sales were down a bit from September of this year.
Commerce –
October 2011:
33 sales (52% distressed), with an average sale price of $172,916, at an average price of $84/Sq Ft.
September 2011:
44 sales (42% distressed), with an average sale price of $203,000, at an average of $98/Sq Ft
October 2010:
29 sales (45% distressed), with an average sale price of $187,220, at and average of $74/Sq Ft.
So sales cooled a bit in Commerce Township from September to October for this year, but did better year over year as compared to last year.
To see all of the statistics for these and the other 6 townships that I track, go to my Move to Milford web site and click on the “What has sold in the area” choice.
Although the statistics that I tracked changed over the years, there is sales data there going back 4 years for some of the markets.
Norm Werner is a full-time, full-service Realtor covering southeastern Michigan in Oakland and Livingston Counties
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